“People’s general focus is on how fragile the recovery is, and recent data points are giving fodder to the double-dip camp,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Banks were pressured by fears Congress would pass stringent rules in an overhaul of financial regulations. Lawmakers were on the verge of adopting a bill that could restrict banks’ trading and investment activities, crimping their profits.

JPMorgan Chase & Co fell 2.2% to $38.03 while Bank of America Corp was off 2.7% at $15.02. The KBW Bank index lost 2.2%.

“We don’t know how oppressive the rules could be, and the market hates that uncertainty.” said Rob Stein, managing partner at Astor Asset Management in Chicago.

The Dow Jones industrial average dropped 145.64 points, or 1.41%, to 10,152.80. The Standard & Poor’s 500 Index fell 18.35 points, or 1.68%, to 1,073.70. The Nasdaq Composite Index lost 36.81 points, or 1.63%, to 2,217.42.

A drop in initial jobless claims and a rise in a gauge of long-lasting manufactured goods failed to offset recent weak economic data, and the Federal Reserve on Wednesday gave a subdued assessment about the economy’s recovery..

Chipmakers as measured by the Philadelphia semiconductor index were off 2.9%. Six semiconductor companies, including Micron Technology Inc have agreed to pay $173 million to settle US antitrust lawsuits accusing them of conspiring to keep computer chip prices artificially high. Micron shares fell 2% to $9.62.

Computer maker Dell Inc fell 6.4% to $12.93. The company said it was focused on improving profitability and diversifying, but investors expressed doubts about the company’s turnaround plan.

In bearish technical signs, the S&P fell below its 14-day moving average and breached the 1,083 level, a key retracement of the slide from its 2010 high in April to the year’s low on 25 May.

Some expected stocks to rebound after a few days in which the market fell on higher volume, a sign of institutional selling known as distribution days.

“Usually in good markets, with a few good distribution days you get a strong reversal, and we’re not seeing it,” said Steven Wolf, managing director of investments at Source Capital Group in Westport, Connecticut. “It’s almost like the market has started to give up.”

Pfizer Inc fell 2.8% to $14.46 after it suspended clinical trials of its experimental arthritis drug.

On the upside, Hasbro Inc gained 4.9 percent to $43.14 after a news report that the toy company was in negotiations for a possible leveraged buyout, a report the company denied.

About 8.65 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year’s estimated daily average of 9.65 billion.

Declining stocks outnumbered advancing ones on both the NYSE and Nasdaq by a ratio of more than 3 to 1.